Mongolia’s prime minister is pushing to end the deadlock with Rio Tinto Group (RIO) over the expansion of the Oyu Tolgoi copper and gold mine by the end of this year, according to an industry official of the landlocked nation.

Prime Minister Altankhuyag Norov sent an order to solve the dispute by the end of this year to government departments including the Economic Development Ministry and the Mining Ministry, according to Khorloo Baatarkhuu, a counselor of Mongolian National Mining Association, who says he’s read the document from the premier’s office. Rio put the $5.4 billion underground expansion at the Oyu Tolgoi mine, the largest foreign investment in Mongolia, on hold in July 2013.

“The central government sent around an order about a month ago, urging people to work on the negotiations diligently and quickly,” Baatarkhuu said in an interview in Chengdu, China, on Oct. 29. “We want the project to resume development as soon as possible as the deadlocked situation hurts the country’s economic growth and forex incomes.”

Officials from the prime minister’s office, the mining ministry and the board of Oyu Tolgoi LLC didn’t respond to requests for comment. The Ministry of Economic Development was dissolved this month as part of a reorganization by Altankhuyag, who said in a televised address Sept. 9 that the government intends to resolve the mine dispute by “this autumn.” Melbourne-based Rio spokesman Ben Mitchell declined to comment.

Third-Largest Mine

Oyu Tolgoi, located about 80 kilometers (50 miles) north of the Chinese border, will contribute about a third of Mongolia’s economy when in full operation and will be the world’s third-biggest copper mine, Rio-controlled unit Turquoise Hill Resources Ltd., which owns 66 percent of the mine, said in a January presentation. Copper on the London Metal Exchange has fallen about 8 percent this year.

Commitments from lenders for $4.2 billion needed to help fund the underground expansion expired after a Sept. 30 deadline to reach an agreement was missed, Turquoise Hill said in a statement earlier this month. The two sides are still negotiating taxation and accounting standards as well as infrastructure and environmental management projects associated with the mine development, Baatarkhuu said.

The deadlock began last year after Rio raised cost estimates for the project. Officials from the Mongolian mining ministry and Rio said during meetings that Baatarkhuu attended that they’re targeting a deal by the end of this year, he said.

Biggest Customer

Copper concentrate production in Mongolia could rise to 1.5 million metric tons in 2015, up 25 percent from this year’s projected 1.2 million, according to Baatarkhuu. Mongolia has one smelter with annual capacity of 100,000 tons and there are no plans to build new ones, he said.

Almost all of Mongolia’s production will be exported to China its “neighboring the biggest customer in the world,” Baatarkhuu said. China imported 317,689 tons of copper concentrate from Mongolia in September, an 83 percent jump from the previous month, customs data showed. Mongolia is now the third-largest exporter of copper concentrate to China, supplying 25 percent of its imports last month.